Any savvy entrepreneur or manager knows that employee retention is a key factor in business success. That’s because each employee loss comes with a high and often avoidable cost.
Results of a study recently published in Employee Benefit News show that it costs an employer an average 33 percent of a worker’s annual salary to hire a replacement. In dollar figures, that estimate equates to $15,000 per person for an employee earning a median salary of $45,000 a year. Across the board, those figures reflect 35,746,000 voluntary separations with a whopping price tag of $536 billion nationwide in 2016, according to the US Bureau of Labor Statistics.
That same study, conducted by The Work Institute, a Franklin, TN workforce intelligence firm, reveals that the vast majority – a full 75 percent – of employee losses are preventable.
Respondents’ reasons for quitting their jobs, as reported in exit interviews and to researchers, fell into one or more of 10 categories:
- Career Development – 22%
- Work-Life Balance – 12
- Management Behavior – 11
- Compensation and Benefits – 9
- Well-being – 9
- Retirement – 8
- Involuntary – 8
- Relocation – 8
- Job Characteristics – 7
- Work Environment – 6
So how can employers best keep workers from jettisoning their jobs? Apex HCM, a market leader in human resources solutions, offers these five tips:
- Hire well: Take the time to hire the right candidate, not just the first applicant, or least expensive labor. Hiring well from the beginning can help save money and time, maximize productivity, boost morale and increase chances for a long and mutually beneficial working relationship.
- Create and communicate the right corporate culture: Corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact., The culture must be clearly communicated and consistently practiced so that employees feel a strong sense of belonging and, ultimately, of loyalty.
- Stay competitive with pay and perks: Competitors can easily lure away a great employee with promise of a pay raise. Savvy employers make sure they keep the upper hand with pay raises as warranted, great benefits and added perks, which can range from frappe makers and breakfast in the breakroom to local gym memberships to tuition reimbursement.
- Play the long game: An employee who feels he’s gone as far as he’s able in one company will quickly jettison a job for a more challenging opportunity. Smart employers keep these workers engaged with additional training, updated responsibilities and chances to advance.
- Stay in touch: Relationships with managers are a key tell as to whether or how long a valued employee likely will stay with a company. Employers who communicate regularly and effectively without micromanaging; provide direction and feedback; and help employees feel that they’re an integral part of the larger organization enjoy higher retention rates.
Investing in employee retention undoubtedly will reap benefits for any company. Apex HCM offers a full suite of software solutions designed to streamline employment processes from applicant tracking to employee onboarding to developing and managing an entire employee pool for growth and success. Contact us at 877-750-2739 or request a demo online.